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Woman under umbrellaBusinesses require a lot of insurance whether it’s a small start-up or a huge franchise. Mistakes, accidents and lawsuits happen frequently and it’s crucial to stay protected. While there are several different types of liability insurance for nearly every industry, these policies don’t cover everything. Some coverages have gaps that leave your company’s assets vulnerable. That’s where commercial umbrella insurance steps in.

Industries that stand to lose a lot through liability lawsuits may want to invest in commercial umbrella insurance. Even the highest amount of insurance has limits, which is why umbrella insurance exists.

Consider commercial umbrella insurance if your business:

  • Interacts with the public
  • Invites people to visit
  • Concerns working with or on other people’s property
  • Handles important customer information
  • Uses heavy machinery
  • Handles customer health

Industries that concern one or more of these factors include:

  • Medicinal Practices/Hospitals
  • Contractors
  • Insurance Agencies
  • Law Firms

If your business works with wealthy or well-connected clients, it’s important to carry enough coverage to protect your company from a hefty lawsuit.

What is a Commercial Umbrella Insurance Policy?

Commercial umbrella insurance fills in the gaps left over by your other liability insurances. This can work for commercial vehicle liability as well as business liability.

How Does Commercial Umbrella Insurance Work?

Say you own a medical practice. One of your surgeons makes a mistake during surgery, causing the need for three more surgeries and ending in irreparable damage for the patient in question. Due to the cost of medical bills, medication, hospital stay and emotional and physical damages, the patient sues your hospital for $2 million. If your malpractice insurance only covers $1 million, you’ll be left paying $1 million out of pocket. Commercial umbrella insurance will pay the difference between the claim and the limit of your initial insurance.

In general, you can add commercial umbrella insurance to these policies:

  • General Liability: General liability insurance provides coverage if bodily injury or property damage occurs as a result of every-day business operations.
  • Commercial Auto Liability: Commercial auto liability provides protection for vehicles used or owned by the company for work purposes.
  • Employer’s Liability: Employer’s liability helps the employer in case an employee or worker sues. This typically comes as part of workers compensation.
  • Hired/Non-Owned Auto Liability: This auto liability is geared specifically for vehicles that are hired or rented by the business.

How Much Does Commercial Umbrella Insurance Cost?

The cost of commercial umbrella insurance varies depending on the size of the business and the amount of insurance purchased, as well as the industry. Certain industries present higher risk of filing a claim and will generally pay more for commercial umbrella insurance. Generally, you may pay around $500-$1500 a year for a small business policy. Other businesses may pay over $2000 for a $1 million commercial umbrella insurance policy. The division of small businesses, medium businesses and large businesses vary per state. Some states may consider a business small if it has 500 employees or less while other states believe small businesses can have a thousand employees.

What Does Commercial Umbrella Insurance Not Cover?

There are limits to commercial umbrella policies. In general, commercial umbrella insurance won’t cover:

  • Floods
  • Uninsured Motorists
  • Professional liability defense costs

Commercial umbrella insurance, like with any insurance policy, has its limits when it comes to certain accidents. Umbrella insurance is not a replacement for any of your insurance policies, but a supplement in case your other policies reach their maximum. It may not cover all property damage or certain negligence lawsuits.

Speak with a Miami insurance agent about the size of your business and its commercial umbrella insurance needs.

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